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Nissan’s New Leaf: An Electric Car and Charging Stations, Too

Nissan’s new zero-emissions electric vehicle is a quiet car with a noisy message. During an Aug. 2 unveiling at the company’s new headquarters in Yokohama, Nissan CEO Carlos Ghosn drove the Leaf, a four-door hatchback, onto the main stage with Japan’s former Prime Minister Junichiro Koizumi in the passenger seat and the mayor of Yokohama and the governor of Kanagawa prefecture sitting in the back. The point was loud and clear: Nissan, which is investing heavily not just in electric-car development but also in infrastructure such as charging stations, has politicians on board.

Then again, Nissan, which aims to be the first automaker to produce an EV for the masses, is taking a different road than its competitors. Recognizing that consumers won’t go for battery-powered vehicles if supplying them with juice isn’t cheap and convenient, the company is working with electric utilities, private organizations and all levels of government to set up networks of charging stations. The effort isn’t limited to Japan: Nissan has formed 27 partnerships around the world to clear the way for EVs. “They know people are going to need [an electric-vehicle ecosystem] and it’s got to be part of the package,” says Chris Richter, senior research analyst for CLSA, a Hong Kong-based brokerage house. “Nissan is pulling together the whole package of subsidies, charging, recycling of batteries  the whole kit.”

The basis of that kit is the Leaf itself, which is expected to go on sale in the U.S., Europe and Japan late next year. Nissan will sell the car for the price of a comparably-sized gasoline-powered car, and company officials say it will be cheaper to run. The Leaf’s maximum speed is more than 90 mph and its range is 100 miles on a full charge. A 30-minute quick charge reaches 80% capacity. And with its lithium-ion battery placed under the vehicle floor, the Leaf has room for five people. While the first Leaf will be built first at Nissan’s Oppama plant in Kanazawa prefecture, production is also planned at the company’s Smyrna, Tennessee, plant. Nissan will use part of the $1.6 billion in loans it received from the U.S. government’s stimulus package to fit the plant with EV assembly lines.

Unlike Toyota and Honda, which are focused on hybrid vehicles, Nissan officials say they see sales of plug-in electrics growing faster than many expect, despite perceptions that they don’t travel far enough or fast enough on a single charge. Nissan says the range of the Leaf is sufficient to meet the daily driving needs of 80% of drivers. Ghosn says that EVs could account for one out of every 10 cars sold by 2020.

Key to meeting that goal, however, is the creation of infrastructure and incentives to convert consumers into EV owners. Nissan has plans to set up a charging network on its home turf of Kanagawa prefecture in 2010, which is part of a larger initiative to promote the use of EVs in Japan through government subsidies and tax exemptions. As part of Japan’s stimulus program, buyers can receive $2,500 for scrapping a gas guzzler for a hybrid or an electric vehicle.

Overseas, Nissan is in talks from Scottsdale, Arizona, to Singapore to establish charging networks and promote what it calls “zero emission mobility.” In the U.S., Nissan and its French partner, Renault, are joining forces with Better Place, which is developing a system of EV service stations where battery packs can be quickly replaced instead of recharged, making “fill-ups” no more time-consuming than topping fuel tanks with gas. Nissan also has a tie with Europcar, a car rental company, to roll out EVs throughout European countries including France, Germany, Belgium, Spain, Italy and the U.K. from 2010. And the Renault-Nissan alliance has an agreement with Monaco to develop a charging network there over the next two years. “Charging stations are like a security blanket,” says Richter. “People don’t want to have to worry that they’re going to be stuck.”

Tatsuo Yoshida, senior analyst at UBS Securities Japan, says, “Nissan is very shrewd leveraging politicians and political power. Nowadays, many local and regional politicians jump at the chance to be perceived as sensitive to environmental concerns and so are eager to partner with Nissan,”he says. “No government can say environmental things are [crap]. They want an EV assembly site or a battery assembly site as an icon,” says Yoshida. “So the motivation of the politicians and the motivation of Nissan matches. It’s very clever.”

Another smart move for Nissan is what Richter calls the “batteries not included” approach. The lithium-ion batteries that power the Leaf are expensive  about $10,000 per car  so Nissan is leasing battery packs to buyers rather than selling them with the EV, reducing the sticker price.

Nissan plans to build 50,000 EVs at its Oppama plant in its first full year of production. The company anticipates sales of 200,000 in 2012, when the car will be sold globally. Richter says 200,000 is a conservative goal. But Yoshida argues that its far from certain drivers will switch. “There’s still a big question mark [regarding sales] because of consumer perception caused by the limitation of driving range.”

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